GREAT DEPRESSION

GREAT DEPRESSION

• Election of 1928• Herbert Hoover Republican

candidate• Alfred Smith Democratic • First Catholic to run for

President

GREAT DEPRESSION

• Herbert Hoover Republican

GREAT DEPRESSION

• Alfred E Smith Democrat

GREAT DEPRESSION

• Hoover’s Campaign promise

• “Chicken in every pot and a car in every garage”

GREAT DEPRESSION

• Hoover wins in a landslide

GREAT DEPRESSION

U. S. Still in prosperity but cracks are showing

GREAT DEPRESSION

•Easy Credit

•Over production of inventory

GREAT DEPRESSION

• Economy was strong based on World War I

• Installment buying

• Dollar down

• dollar a week

GREAT DEPRESSION

• Made it easy for all to buy

• Repossessed if payments were missed

• Stock Market opened to all Americans

• Some were novice

GREAT DEPRESSION

• Speculation

• Margin

• Buyer puts 10% down on a stock

• Broker provides rest as a loan or margin

GREAT DEPRESSION

• Buyer gambles that stock is going to increase

GREAT DEPRESSION

• If price fell broker called in margin demanded immediate payment

• Usually investor or buyer lost everything

GREAT DEPRESSION

• BUBBLE BURSTS

• October 29, 1929

• “Black Tuesday”

• Stock prices plummeted

GREAT DEPRESSION

• 29th and 30th 16 million shares were sold

• By two weeks time index price fell by 50%

• 30 billion dollars were lost in the next weeks

GREAT DEPRESSION

• Unsound banking practices led to:

Speculation

risky loans

fake investment schemes

CAUSES OF GREAT DEPRESSION

• Credit

• Too much

• People and banks suffered

• People could not pay

• Banks lost money

GREAT DEPRESSION

• Not all lost some gained tremendously

• Joseph Kennedy Sr. allegedly

• Got inside information and sold before the market crashed

GREAT DEPRESSION

• Agriculture

• Depressed for years

• Overproduction caused low prices

• Agriculture Marketing Act

GREAT DEPRESSION

• Established loans to farmers • Federal Farm Board• Purchased surplus crops• Could not limit production• Depression in Europe closed a

market for surplus food

GREAT DEPRESSION

• Depression was world wide

• Smoot-Hawley Tariff

• High tariffs on imported goods to protect U S goods

GREAT DEPRESSION

• Foreign countries flooded market

• Prices continued to fall

• Farmers continued to grow crops

• Prices plummeted depression worsened especially for farmers

GREAT DEPRESSION

• Banking and Finance

• Federal Reserve Board was urged to regulate credit and speculation

• They did nothing

GREAT DEPRESSION

• Deposits shrank

• Massive withdrawals

• Holidays were declared in Nevada, Louisiana Michigan

• Emergency credit pool for relief

GREAT DEPRESSION

• Bankers formed National Credit Corporation

• Failed to help situation

• Fearful that loans would jeopardize their banks

CAUSES OF GREAT DEPRESSION

• Few basic industries

• No diversification–2 major industries

• Construction

• automobile

CAUSES OF GREAT DEPRESSION

• Uneven distribution of wealth

• More than one half of Americans lived on edge of poverty

CAUSES OF GREAT DEPRESSION

• International debt

• Europe could not pay back loans to United States from World War I

• High Tariffs on American goods

• Europe responded with the same high tariffs on American goods

GREAT DEPRESSION

GREAT DEPRESSION

• All failed

• Reconstruction Finance Corporation (RFC)

• Jan 1932

• Provided loans to banks

GREAT DEPRESSION

• Railroads • Life insurance• Farm Mortgage assistance• It did ease the banking crisis • January 1932 346 banks failed • April 46 failed

GREAT DEPRESSION

• Unemployment Relief Organization

• Stimulate private charities

• 3 other major measures were passed by Congress

GREAT DEPRESSION

• 300 million dollars were allocated to help liquidate banks loans for public works

Loans to states to help in public projects

GREAT DEPRESSION

• 30 million allocated

• Too cautious (RFC) to help

• None for Public Works

GREAT DEPRESSION

• Hoover would not direct aid to unemployed

• Private Charities

• Opposition to direct relief

GREAT DEPRESSION

• Cemented his reputation as doing nothing to ease depression

• Shack villages were called Hooversvilles

Herbert Hoover

• Newspapers wrapped around people were called Hoover Blankets

• Broken down cars were called Hoover wagons

• Pockets turned inside out were called Hoover Flags

GREAT DEPRESSION

• BONUS MARCH 1932• Hunger Marches and unemployed

rioted• Bonus Expeditionary Force (BEF)• World War I veterans were able to

borrow against life insurance in 1945

GREAT DEPRESSION

• Technically it was not a bonus

• Veterans wanted the money now

• Needed the money for necessities

GREAT DEPRESSION

• Congress could not afford payments

• Yet they appropriated $100,000 for the marches return home

• ½ took offer

GREAT DEPRESSION

• Others occupied buildings to be knocked down for public work projects

• July 28, 1932 police tried to evict squatters

• 2 veterans killed stalemate continued

GREAT DEPRESSION

• General Douglas McArthur had orders to move vets

• He took it upon himself to drive them farther than President Hoover ordered

GREAT DEPRESSION

• McArthur along with junior officers Patton and Eisenhower

• Used tanks guns and tear gas to remove veterans

GREAT DEPRESSION

• McArthur disobeyed orders to stop

• Hoover while upset did nothing to stop McArthur

• Reinforced Hoover’s image as a do nothing President

GREAT DEPRESSION

• ELECTION OF 1932

• FDR Franklin D. Roosevelt

• Elected President

• New outlook for United States